X down: U.S. Steel stock falls 7% after President Joe Biden blocks takeover by Japanese giant Nippon Steel

U.S. Steel (NYSE: X) stock was down more than 5% in midday trading Friday, after President Joe Biden blocked a nearly $15 billion takeover bid by Japan’s Nippon Steel (NISTF), arguing foreign ownership over one of America’s largest steel producers posed a threat to national security.

U.S. Steel’s stock plunged more than 7% in the late morning following the announcement.

The move by Biden marks a bold use of executive authority in the final days of his presidency.

“A strong domestically owned and operated steel industry represents an essential national security priority and is critical for resilient supply chains,” Biden said in a statement. “That is because steel powers our country: our infrastructure, our auto industry, and our defense industrial base.”

Biden added that U.S. steel companies have faced unfair trade practices as foreign companies dumped steel on global markets at artificially low prices, leading to job losses and factory closures in America, and said it was his “responsibility to block foreign ownership of this vital American company.”

Nippon Steel and U.S. Steel jointly condemned the decision, saying the move “reflects a clear violation of due process and the law” and was meant to support Biden’s political agenda. Biden had previously promised to prevent the acquisition.

Meanwhile, United Steelworkers International President David McCall praised the move, calling Nippon a “serial trade cheater that for decades worked to undermine our domestic industry by dumping its products into our market.”

The botched deal puts a spotlight on trade tariffs and policies of protectionism, likely to be important issues in the next four years during President Trump’s second term. Trump, who also said he would block Japan’s Nippon Steel from buying U.S. Steel, has pledged to slap a 10% to 20% tariff on all imports, with a 60% to 100% tariff on imports from China, which experts say could greatly drive up prices in the U.S.

Pittsburgh-based U.S. Steel, the nation’s second-largest steel manufacturer, now employs a reported 21,803 workers, which is a fraction of its former workforce, a fact that highlights the American steel industry’s longtime struggle.